European research funding and regional technological capabilities: Network composition analysis

We use network and correspondence analysis to describe the compositionof the research networks in the European BRITE--EURAM program. Our mainfinding is that 27\% of the participants in this program fall into one oftwo sets of highly ``interconnected'' institutions --one centered aroundlarge firms (with smaller firms and research centers providing specializedservices), and the other around universities--. Moreover, these ``hubs''are composed largely of institutions coming from the technologically mostadvanced regions of Europe. This is suggestive of the difficulties of attainingEuropean ``cohesion'', as technically advanced institutions naturally linkwith partners of similar technological capabilities.

Radial measures of public services deficit for regional allocation of public funds

The goal of this paper is to present an optimal resource allocation model for the regional allocation of public service inputs. Theproposed solution leads to maximise the relative public service availability in regions located below the best availability frontier, subject to exogenous budget restrictions and equality ofaccess for equal need criteria (equity-based notion of regional needs). The construction of non-parametric deficit indicators is proposed for public service availability by a novel application of Data Envelopment Analysis (DEA) models, whose results offer advantages for the evaluation and improvement of decentralised public resource allocation systems. The method introduced in this paper has relevance as a resource allocation guide for the majority of services centrally funded by the public sector in a given country, such as health care, basic and higher education, citizen safety, justice, transportation, environmental protection, leisure, culture, housing and city planning, etc.

North-South convergence and the allocation of CO2 emissions

We postulate a two-region world, comprised of North (calibrated after the US) and South(calibrated after China). Our optimization results show the compatibility of the following threedesiderata:(1) Global CO2 emissions follow a conservative path that leads to the stabilizationof concentrations at 450 ppm.(2) North and South converge to a path of sustained growth at 1% per year (28.2%per generation) in 2075.(3) During the transition to the steady state, North also grows at 1% per year whileSouth s rates of growth are markedly higher.The transition paths require a drastic reduction of the share of emissions allocated to North,large investments in knowledge, both in North and South, as well as very large investments ineducation in South. Surprisingly, in order to sustain North s utility growth rate, some output mustbe transferred from South to North during the transition.Although undoubtedly subject to many caveats, our results support a degree of optimism byproviding prima facie evidence of the possibility of tackling climate change in a way that is fairboth across generations and across regions while allowing for positive rates of humandevelopment.

Incentives and pharmaceutical reimbursement reforms in Spain

The aim of this paper is to assess whether cost-containment has beenaffected by recent pharmaceutical reimbursement reforms that have beenintroduced in the Spanish health care system over the period 1996-2002,under the conservative Popular Party government. Four main reimbursementpolicies can be observed in the Spanish pharmaceutical market after1996, each of them largely unintegrated with the other three. First, asecond supplementary negative list of excluded pharmaceutical productswas introduced in 1998. Second, a reference pricing system wasintroduced in December 2000, with annual updating and enlargement.Third, the pharmacies payment system has moved from the traditionalset margin on the consumer price to a margin that varies according tothe consumer price of the product, the generic status of the product,and the volume of sales by pharmacies. And fourth, general agreementsbetween the government and the industry have been reached with costcontainment objectives. In the final section of this paper we presentan overall assessment of the impact of these pharmaceuticalreimbursement policies on the behaviour of the agents in thepharmaceutical market.

Intergenerational mobility and the informative content of surnames

We propose an alternative method for measuring intergenerational mobility. Measurements obtained fromtraditional methods (based on panel data) are scarce, difficult to compare across countries and almost impossible to get across time. In particular, this means that we do not know how intergenerational mobility is correlated with growth, income or the degree of inequality.Our proposal is to measure the informative content of surnames in one census. The more information thesurname has on the income of an individual, the more important is her background in determining her outcomes; and thus, the less mobility there is.The reason is that surnames provide information about family relationships because the distribution ofsurnames is necessarily very skewed. A large percentage of the population is bound to have a very unfrequent surname. For them the partition generated by surnames is very informative on family linkages.First, we develop a model whose endogenous variable is the joint distribution of surnames and income.There, we explore the relationship between mobility and the informative content of surnames. We allow for assortative mating to be a determinant of both.Second, we use our methodology to show that in large Spanish region the informative content of surnamesis large and consistent with the model. We also show that it has increased over time, indicating a substantial drop in the degree of mobility. Finally, using the peculiarities of the Spanish surname convention we show that the degree of assortative mating has also increased over time, in such a manner that might explain the decrease in mobility observed.Our method allows us to provide measures of mobility comparable across time. It should also allow us tostudy other issues related to inheritance.

Downsizing, job insecurity and firm reputation

This paper studies how firms make layoff decisions in the presence of adverse shocks. In this uncertain environment, workers' expectations about their job security affect their on-the-job performance. This productivity effect on job insecurity forces firms to strike a balance between laying off redundant workers and maintaining survivors' commitment when deciding on the amount and timing of downsizing. This framework offers an explanation of conservative employment practices (such as zero or reduced layoffs) based on firms having private information about their future profits. High retention rates and wages can signal that the firm has a bright future, boosting workers' confidence. Moreover, the model provides clear predictions about when waves of downsizing will occur as opposed to one-time massive cuts.

Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth

Youth is one of the phases in the life-cycle when some of the most decisivelife transitions take place. Entering the labour market or leaving parentalhome are events with important consequences for the economic well-beingof young adults. In this paper, the interrelationship between employment,residential emancipation and poverty dynamics is studied for eight Europeancountries by means of an econometric model with feedback effects. Resultsshow that youth poverty genuine state dependence is positive and highly significant.Evidence proves there is a strong causal effect between poverty andleaving home in Scandinavian countries, however, time in economic hardshipdoes not last long. In Southern Europe, instead, youth tend to leave theirparental home much later in order to avoid falling into a poverty state that ismore persistent. Past poverty has negative consequences on the likelihood ofemployment.

The evolution of inequity in the access to health care in Spain: 1987-2001

This paper reports an analysis of the evolution of equity in access to health care in Spain over the period 1987-2001, a time span covering the development of the modern Spanish National Health System. Our measures of access are the probabilities of visiting a doctor, using emergency services and being hospitalised. For these three measures we obtain indices of horizontal inequity from microeconometric models of utilization that exploit the individual information in the Spanish National Health Surveys of 1987 and 2001. We find that by 2001 the system has improved in the sense that differences in income no longer lead to different access given the same level of need. However, the tenure of private health insurance leads to differences in access given the same level of need, and its contribution to inequity has increased over time, both because insurance is more concentrated among the rich and because the elasticity of utilization for the three services has increased too.

The social value of health programs: Is age a relevant factor?

In cost-effectiveness analysis (CEA) it is usually assumed that a QALY is of equal value to everybody, irrespective of the patient's age. However, it is possible that society assigns different social values to a QALY according to who gets it. In this paper we discuss the possibility of weighting health benefits for age in CEA. We also examinethe possibility that age-related preferences depend on the size of the health gain. An experiment was performedto test these hypotheses. The results assessing suggest that the patient's age is a relevant factor when assessing health gains.

R&D cooperation and spillovers: Some empirical evidence

This paper provides some first empirical evidence on the relationshipbetween R&D spillovers and R&D cooperation. The results suggest disentangling different aspects of know-how flows. Firms which rate incoming spillovers more importantly and who can limit outgoing spillovers by a more effective protection of know-how, are more likely to cooperate in R&D. Our analysis also finds that cooperating firms have higher incoming spillovers and higher protection of know-how, indicating that cooperation may serve as a vehicle to manage information flows. Our results thus suggest that on the one hand the information sharing and coordination aspects of incoming spillovers are crucial in understanding cooperation, while on the other hand, protection against outgoing spillovers is important for firms to engage in stable cooperative agreements by reducing free-rider problems. Distinguishing different types of cooperative partners reveals that while managing outgoing spillovers is less critical in alliances with non-commercial research partners than between vertically related partners, the incoming spillovers seem to be more critical in understanding the former type of R&D cooperation.

Complementarity between technology make and buy in innovation strategies: Evidence from Belgiam manufacturing firms

This paper characterizes the innovation strategy of manufacturing firms andexamines the relation between the innovation strategy and importantindustry-, firm- and innovation-specific characteristics using Belgiandata from the Eurostat Community Innovation Survey. In addition to importantsize effects explaining innovation, we find that high perceived risks andcosts and low appropriability of innovations do not discourage innovation,but rather determine how the innovation sourcing strategy is chosen. Withrespect to the determinants of the decision of the innovative firm toproduce technology itself (Make) or to source technology externally (Buy),we find that small firms are more likely restrict their innovation strategyto an exclusive make or buy strategy, while large firms are more likely tocombine both internal and external knowledge acquisition in their innovationstrategy. An interesting result that highlights the complementary nature ofthe Make and Buy decisions, is that, controlled for firm size, companies forwhich internal information is an important source for innovation are morelikely to combine internal and external sources of technology. We find thisto be evidence of the fact that in-house R&D generates the necessaryabsorptive capacity to profit from external knowledge acquisition. Also theeffectiveness of different mechanisms to appropriate the benefits ofinnovations and the internal organizational resistance against change areimportant determinants of the firm's technology sourcing strategy.

Unemployment duration and workers' wage aspirations in Spain

This paper examines unemployed workers' declared willingness to work for a wage lower than the one warranted by their qualification. We analyze which personal and economic characteristics determine thiswillingness and how it changes as unemployment spells lengthen. Moreover, we also study the influence of this willingness on unemployment duration. The main results are: (i) Young workers, those less educated and those living in regions with high unemployment show a more positive attitude towards accepting lower wages while married women with a working husband show more negative attitudes; (ii) The exhaustion of unemployment benefits has positive effects in the transition probability of the attitude from negative to positive; (iii) The effect of this attitude on the unemployment hazard rate is positive but only marginally significant which may be showing that this willingness is not only reflecting the worker's reservation wage but also some unobserved heterogeneity; (iv) The negative duration dependence of the unemployment hazard rate is substantially reduced when unobserved heterogeneity is controlled for.

Employee referrals and the inter-industry wage structure

This paper investigates the role of employee referrals in the labor market.Using an original data set, I find that industries that pay wage premia andhave characteristics associated with high-wage sectors rely mainly on employeereferrals to fill jobs. Moreover, unemployment rates are higher in industries which use employee referrals more extensively. This paper develops an equilibrium matching model which can explain these empirical regularities. Inthis model, the matching process sorts heterogeneous firms and workers into two distinct groups: referrals match "good" jobs to "good" workers, while formalmethods (e.g., newspaper ads and employment agencies) match less-attractive jobs to disadvantaged workers. Thus, well-connected workers who learn quickly aboutjob opportunities use referrals to jump job queues, while those who are less well placed in the labor market search for jobs through formal methods. The split of firms and workers between referrals and formal search is, however, not necessarily efficient. Congestion externalities in referral search imply that unemployment would be closer to the optimal rate if firms and workers 'at themargin' searched formally.

Protective or counter-productive? Labor market institutions and the effect of immigration on EU natives

We estimate the effect of immigrant flows on native employment in WesternEurope, and then ask whether the employment consequences of immigrationvary with institutions that affect labor market flexibility. Reducedflexibility may protect natives from immigrant competition in the nearterm, but our theoretical framework suggests that reduced flexibility islikely to increase the negative impact of immigration on equilibriumemployment. In models without interactions, OLS estimates for a panel ofEuropean countries in the 1980s and 1990s show small, mostly negativeimmigration effects. To reduce bias from the possible endogeneity ofimmigration flows, we use the fact that many immigrants arriving after1991 were refugees from the Balkan wars. An IV strategy based onvariation in the number of immigrants from former Yugoslavia generateslarger though mostly insignificant negative estimates. We then estimatemodels allowing interactions between the employment response toimmigration and institutional characteristics including business entrycosts. These results, limited to the sample of native men, generallysuggest that reduced flexibility increases the negative impact ofimmigration. Many of the estimated interaction terms are significant,and imply a significant negative effect on employment in countrieswith restrictive institutions.

Parental altruism under imperfect information: Theory and evidence

Can we reconcile the predictions of the altruism model of the family withthe evidence on parental monetary transfers in the US? This paper providesa new assessment of this question. I expand the altruism model by introducingeffort of the child and by relaxing the assumption of perfect informationof the parent about the labor market opportunities of the child. First,I solve and simulate a model of altruism and labor supply under imperfectinformation. Second, I use cross-sectional data to test the following prediction of the model: Are parental transfers especially responsive tothe income variations of children who are very attached to the labor market? The results of the analysis suggest that imperfect informationaccounts for many of the patterns of intergenerational transfers in theUS.